The Federal Trade Commission (FTC) unanimously voted to block mattress maker Tempur Sealy's purchase of Mattress Firm in a $4 billion deal. The decision was made to prevent the suppression of competition and potential price increases for mattress buyers. The acquisition, which would have given the combined company 3,000 stores and 71 manufacturing facilities, was seen as a move to dominate the market and limit access for competing mattress suppliers.
The FTC authorized a lawsuit in federal court to challenge the deal, citing concerns that it could harm working-class consumers who rely on financing to purchase mattresses. The Commission expressed worries that the acquisition could lead to layoffs in American manufacturing jobs and drive competitors out of business.
Tempur Sealy, the world's largest mattress supplier, defended the acquisition, stating that the bedding industry is highly competitive and that only a small fraction of brick-and-mortar storefronts are Mattress Firms. The company expressed disappointment in the FTC's decision and emphasized its efforts to work with the Commission to secure regulatory approval.
Analysts initially viewed the deal as beneficial for both parties, as mattress and furniture sales had slowed following a surge during the pandemic. Mattress Firm, the largest bedding retailer in the United States, was already facing financial challenges, including a previous bankruptcy. The FTC's intervention aims to maintain competition in the premium mattress space and protect consumers from potential price hikes.
Tempur Sealy and Mattress Firm remain optimistic about the transaction's completion, expecting to finalize the deal in late 2024 or early 2025 despite the regulatory hurdles. The litigation process is ongoing, with both companies expressing confidence in the benefits the acquisition would bring to consumers, employees, and the bedding industry as a whole.
